The General Court of the EU annuls the Commission’s clearance decision of Liberty Global’s acquisition of Ziggo in 2014 (Judg…

In October 2014, the European Commission approved the proposed acquisition of Dutch cable TV operator Ziggo by Liberty Global, subject to commitments. In July 2015, this decision was challenged before the General Court of the EU by Ziggo’s competitor KPN.

According to KPN, the commitments would not suffice to address all the competition concerns, especially in the sports broadcast market. KPN argued that the Commission did not carry out a proper investigation into the consequences that the transaction would have on the pay sports TV market and that a stake held by Liberty’s chairman in Eurosport had not been scrutinized in the assessment of the transaction.

In KPN’s view, pay sports TV and pay films TV would be two separate markets. As opposed to pay films TV, pay sports TV is normally broadcasted live and customers are not willing to watch its content after it has been broadcasted.

In addition, KPN pointed out that there are only two pay TV sports channels in the Dutch market: Liberty’s Sport1 (currently Zigo Sport Totaal) and Fox Sports. In KPN’s view, the transaction provided Liberty the possibility to deny content or increase prices to its competitors.

The General Court of the EU has found that the Commission erred by not assessing the possible effects of the transaction on the potential market for the wholesale supply and acquisition of premium TV sports channels. The Commission can only decide not to analyse a specific market if it is clearly and unequivocally proven that there would be no significant competition concerns therein. However, the only clear finding that is contained in the decision is that the independent competitor Fox News is active in the market, which does not exclude the market power of the merged entity.

On this basis, the General Court of the EU has upheld KPN’s claims and annulled the Commission’s decision.

As a consequence, the Commission will have to reassess the acquisition in accordance to the findings of the General Court’s judgment.

The General Court of the EU confirms €20 million fine imposed on Marine Harvest for its failure to notify to the European Commission the acquisition of salmon producer Morpol (Judgment of 26 October 2017 in Case T-704/14 Marine Harvest v Commission)

In 2014, the Norwegian seafood company Marine Harvest was fined €20 million for failing to notify the acquisition of its competitor Morpol at the appropriate moment in time.

Marine Harvest bought 48.5% of Morpol on 12 December 2012 and closed the deal some days later. In compliance with Norwegian law, a mandatory public offer for Morpol’s remaining shares was triggered and closed in March 2013. Although Marine Harvest had engaged in pre-notification contacts with the Commission since December 2012, it only filed the complete notification in August 2013.

The Commission then decided to clear the transaction subject to a divestment and to fine Marine Harvest for failing to file the deal before the first part of the transaction was implemented, i.e. in December 2012. The amount of the fine was set taking into account two infringements: the failure to notify the transaction prior to its completion and the implementation of the transaction prior to the Commission’s clearance.

The Commission’s decision was appealed before the General Court of the EU by Marine Harvest. The latter argued that in between the first and the second stage of the purchase, the shares’ voting rights had not been used. Moreover, in the applicant’s view, the Commission was punishing twice the same infringement, which would violate the non bis in idem principle.

The General Court of the EU has not upheld Marine Harvest’s arguments and has confirmed the Commission’s decision and corresponding fine.

In particular, it has found that the decisive moment, which triggers the obligation to notify, is the acquisition of control in the formal sense and not the exercise of such control.

However, the General Court of the EU has acknowledged that the current legal framework is unusual given that it foresees fines for the infringement of two provisions, where the infringement of the first one necessarily entails the violation of the second one. Despite this, these are the rules to which the Commission is bound. In addition, upholding Marine Hasvest’s argument would lead to privilege undertakings infringing both provisions over those which have only disregarded one of them.